The latest research for the property market shows Sydney has finally returned to positive price growth for the first time since January 2022. An increase of 0.3% was experienced in February thanks to a continued shortage of properties for sale which has persisted since last year’s unusually slow Spring selling season. Auction clearance rates are now back up in the 70%’s – a result we have not seen for 12 months.
The start to 2023 has seen an unexpected yet most welcome increase in buyer activity. Attendance at open homes has almost doubled since the end of last year. Buyer competition has resulted in some better than expected results and the flow of new listings will be a key indicator to watch over the coming months. If an increase above average levels is experienced, this could definitely weigh on housing prices.
It is difficult to say for certain whether the ‘fixed rate cliff’ that has been touted in recent media headlines will ever eventuate. At the moment, Core Logic’s head of research Eliza Owen says that “listings data and arrears data suggest there is minimal impact on the housing market from defaults”. This may change however in the second half of the year as the majority of fixed rate home loans expire.
If we start to see a significant increase in distressed listings as homeowners struggle to service their loans, the downturn may begin to accelerate again. Three of the big four banks are now forecasting rates to rise another 0.75%. Pushing rates to that level could add further pressure to the housing market as there would be an influx of forced sales hitting the market.
For now, it really is too early to tell whether we have hit the bottom of the property cycle as there are several factors at play. We will be earnestly watching the RBA’s moves over the coming months as well as the numbers of new listings to understand whether the ‘fixed rate cliff’ will ever become a reality.
In the short term we are seeing some outstanding results being achieved for homes across all suburbs as many families take the opportunity to upsize from a unit or townhouse into a freestanding home. The current market represents an ideal time for those upsizers who were priced out of the market due to the pandemic ‘boom’, as well as first home buyers who are looking to take advantage of the incentives on offer including the option of paying zero upfront stamp duty.
The longer term outlook is also looking positive with a stabilisation of interest rates expected later in the year. This could lead to a more positive sentiment among sellers and once rates begin to decrease will have a further impact on buyer demand. If all goes to plan, then we would be safe to expect a return to a more balanced market in early 2024 with a return to price increases possibly later in that year.
Ultimately, the decision of when to sell really does come down to your own individual circumstances. If you would like to discuss your own situation with us and find out what you can do to add immediate value to your home, please feel free to BOOK A CALL with one of our Vendor Advocates. Not only can we assist you with preparing your home for sale, we take the guesswork out of choosing the agent by providing you with 3 of the best agents in your local area.